The political economy of sovereign debt

This dissertation examines international lending arrangements between a competitive foreign investor and a less-developed country. Given that the benefits and costs of borrowing are distributed unequally across society, it is of interest to examine the conditions under which borrowing occurs and how the borrowed funds are allocated. Three theoretical models are developed to consider optimal lending arrangements in the presence of sovereign risk. The models show how a society's level and distribution of wealth influences its access to loans and the terms of the loan agreements. Optimal loan contracts are established, which place either a debt ceiling or a debt floor on the amount of the loan that, will be offered. ^

The political economy of inequality and growth: Essays on sovereign debt, democracy and saving

This dissertation addresses three issues in the political economy of growth literature. The first study empirically tests the hypothesis that income inequality influences the size of a country's sovereign debt for a sample of developing countries for the period 1970–1990. The argument examined is that governments tend to yield to popular pressures to engage in redistributive policies, partially financed by foreign borrowing. Facing increased risk of default, international creditors limit the credit they extend, with the result that borrowing countries invest less and grow at a slower pace. The findings do not seem to support the negative relationship between inequality and sovereign debt, as there is evidence of increases in multilateral, countercyclical flows until the mid 1980s in Latin America. The hypothesis would hold for the period 1983–1990. Debt flows and levels seem to be positively correlated with growth as expected. ^ The second study empirically investigates the hypothesis that pronounced levels of inequality lead to unconsolidated democracies. We test the existence of a nonmonotonic relationship between inequality and democracy for a sample of Latin American countries for the period 1970–2000, where democracy appears to consolidate at some intermediate level of inequality. We find that the nonmonotonic relationship holds using instrumental variables methods. Bolivia seems to be a case of unconsolidated democracy. The positive relationship between per capita income and democracy disappears once fixed effects are introduced. ^ The third study explores the nonlinear relationship between per capita income and private saving levels in Latin America. Several estimation methods are presented; however, only the estimation of a dynamic specification through a state-of-the-art general method of moments estimator yields consistent estimates with increased efficiency. Results support the hypothesis that income positively affects private saving, while system GMM reveals nonlinear effects at income levels that exceed the ones included in this sample for the period 1960–1994. We also find that growth, government dissaving, and tightening of credit constraints have a highly significant and positive effect on private saving. ^

The impact of the Eurozone sovereign debt crisis on bond fund performance persistence: Evidence from a small market

We evaluate the impact of the Eurozone sovereign debt crisis on the performance and performance persistence of a survivorship bias-free sample of bond funds from a small market, identified as one of the most affected by this event, during the 2001–2012 period. Besides avoiding data mining, we also introduce a methodological innovation in assessing bond fund performance persistence. Our results show that bond funds underperform significantly both during crisis and non-crisis periods. Besides, we find strong evidence of performance persistence, for both short- and longer-term horizons, during non-crisis periods but not during the debt crisis. In this way, the persistence phenomenon in small markets seems to occur only during non-crisis periods and this is valuable information for bond fund investors to exploit.

On the new Kenyan sovereign wealth fund

Sovereign wealth funds (SWFs) have been established in several countries to manage the revenues arising from exhaustible natural resources. SWFs allow consumption to be spread between generations, and between periods of high and low natural resource prices. In this paper the arguments for and against establishing an SWF in Kenya are considered. A first section considers the argument that Kenya is too poor to allocate oil revenues to such a fund. A second section discusses the principles underlying such a fund. A final section concludes by considering the steps that are being taken to establish a Kenyan SWF.

The bacterial chromosome segregation protein Spo0J spreads along DNA from parS nucleation sites

Regulation of chromosome inheritance is essential to ensure proper transmission of genetic information. To accomplish accurate genome segregation, cells organize their chromosomes and actively separate them prior to cytokinesis. In Bacillus subtilis the Spo0J protein is required for accurate chromosome segregation and it regulates the developmental switch from vegetative growth to sporulation. Spo0J is a DNA-binding protein that recognizes at least eight identified parS sites located near the origin of replication. As judged by fluorescence microscopy, Spo0J forms discrete foci associated with the oriC region of the chromosome throughout the cell cycle. In an attempt to determine the mechanisms utilized by Spo0J to facilitate productive chromosome segregation, we have investigated the DNA binding activity of Spo0J. In vivo we find Spo0J associates with several kilobases of DNA flanking its specific binding sites (parS) through a parS-dependent nucleation event that promotes lateral spreading of Spo0J along the chromosome. Using purified components we find that Spo0J has the ability to coat non-specific DNA substrates. These 'Spo0J domains' provide large structures near oriC that could potentially demark, organize or localize the origin region of the chromosome.

Risk premiumin the global creditMarkets: 2006-2012

¿What have we learnt from the 2006-2012 crisis, including events such as the subprime crisis, the bankruptcy of Lehman Brothers or the European sovereign debt crisis, among others? It is usually assumed that in firms that have a CDS quotation, this CDS is the key factor in establishing the credit premiumrisk for a new financial asset. Thus, the CDS is a key element for any investor in taking relative value opportunities across a firm’s capital structure. In the first chapter we study the most relevant aspects of the microstructure of the CDS market in terms of pricing, to have a clear idea of how this market works. We consider that such an analysis is a necessary point for establishing a solid base for the rest of the chapters in order to carry out the different empirical studies we perform. In its document “Basel III: A global regulatory framework for more resilient banks and banking systems”, Basel sets the requirement of a capital charge for credit valuation adjustment (CVA) risk in the trading book and its methodology for the computation for the capital requirement. This regulatory requirement has added extra pressure for in-depth knowledge of the CDS market and this motivates the analysis performed in this thesis. The problem arises in estimating of the credit risk premium for those counterparties without a directly quoted CDS in the market. How can we estimate the credit spread for an issuer without CDS? In addition to this, given the high volatility period in the credit market in the last few years and, in particular, after the default of Lehman Brothers on 15 September 2008, we observe the presence of big outliers in the distribution of credit spread in the different combinations of rating, industry and region. After an exhaustive analysis of the results from the different models studied, we have reached the following conclusions. It is clear that hierarchical regression models fit the data much better than those of non-hierarchical regression. Furthermore,we generally prefer the median model (50%-quantile regression) to the mean model (standard OLS regression) due to its robustness when assigning the price to a new credit asset without spread,minimizing the “inversion problem”. Finally, an additional fundamental reason to prefer the median model is the typical "right skewness" distribution of CDS spreads...

Protect Your Family and Community : How Zika Spreads

Through simple illustrations, this sheet explains how the Zika virus is spread from mosquito to people.

Credit spreads and monetary policy in a small open economy: an analysis of the colombian economy

This paper estimates Bejarano and Charry (2014)’s small open economy with financial frictions model for the Colombian economy using Bayesian estimation techniques. Additionally, I compute the welfare gains of implementing an optimal response to credit spreads into an augmented Taylor rule. The main result is that a reaction to credit spreads does not imply significant welfare gains unless the economic disturbances increases its volatility, like the disruption implied by a financial crisis. Otherwise its impact over the macroeconomic variables is null.

Examining the use of bid information in predicting the contractor’s performance

Purpose – The purpose of this paper is to examine the use of bid information, including both price and non-price factors in predicting the bidder’s performance. Design/methodology/approach – The practice of the industry was first reviewed. Data on bid evaluation and performance records of the successful bids were then obtained from the Hong Kong Housing Department, the largest housing provider in Hong Kong. This was followed by the development of a radial basis function (RBF) neural network based performance prediction model. Findings – It is found that public clients are more conscientious and include non-price factors in their bid evaluation equations. With the input variables used the information is available at the time of the bid and the output variable is the project performance score recorded during work in progress achieved by the successful bidder. It was found that past project performance score is the most sensitive input variable in predicting future performance. Research limitations/implications – The paper shows the inadequacy of using price alone for bid award criterion. The need for a systemic performance evaluation is also highlighted, as this information is highly instrumental for subsequent bid evaluations. The caveat for this study is that the prediction model was developed based on data obtained from one single source. Originality/value – The value of the paper is in the use of an RBF neural network as the prediction tool because it can model non-linear function. This capability avoids tedious ‘‘trial and error’’ in deciding the number of hidden layers to be used in the network model. Keywords Hong Kong, Construction industry, Neural nets, Modelling, Bid offer spreads Paper type Research paper

Modelling water droplet movement on a leaf surface

The central aim for the research undertaken in this PhD thesis is the development of a model for simulating water droplet movement on a leaf surface and to compare the model behavior with experimental observations. A series of five papers has been presented to explain systematically the way in which this droplet modelling work has been realised. Knowing the path of the droplet on the leaf surface is important for understanding how a droplet of water, pesticide, or nutrient will be absorbed through the leaf surface. An important aspect of the research is the generation of a leaf surface representation that acts as the foundation of the droplet model. Initially a laser scanner is used to capture the surface characteristics for two types of leaves in the form of a large scattered data set. After the identification of the leaf surface boundary, a set of internal points is chosen over which a triangulation of the surface is constructed. We present a novel hybrid approach for leaf surface fitting on this triangulation that combines Clough-Tocher (CT) and radial basis function (RBF) methods to achieve a surface with a continuously turning normal. The accuracy of the hybrid technique is assessed using numerical experimentation. The hybrid CT-RBF method is shown to give good representations of Frangipani and Anthurium leaves. Such leaf models facilitate an understanding of plant development and permit the modelling of the interaction of plants with their environment. The motion of a droplet traversing this virtual leaf surface is affected by various forces including gravity, friction and resistance between the surface and the droplet. The innovation of our model is the use of thin-film theory in the context of droplet movement to determine the thickness of the droplet as it moves on the surface. Experimental verification shows that the droplet model captures reality quite well and produces realistic droplet motion on the leaf surface. Most importantly, we observed that the simulated droplet motion follows the contours of the surface and spreads as a thin film. In the future, the model may be applied to determine the path of a droplet of pesticide along a leaf surface before it falls from or comes to a standstill on the surface. It will also be used to study the paths of many droplets of water or pesticide moving and colliding on the surface.

Victoria regia's bequest to modern architecture

This paper will explore the relationship between the giant South American waterlily, the Victoria regia (today named Victoria amazonica), and the 1914 Glashaus exposition building by the German architect, Bruno Taut. Starting with a general botanical introduction of Victoria regia, the paper exposes the first European cultivation of the lily by Joseph Paxton at Chatsworth,England, in 1849. Following this initial cultivation, Paxton subsequently develops a specialist greenhouse for the plant, that later becomes the prototype for all Victoria regia greenhouses. However, from about 1860 as Victoria regia cultivation spreads to continental Europe, a greenhouse that differs from Paxton’s prototype subsequently evolves. An investigation of these later continental European greenhouses, coupled with an exposure of Taut’s own writings concerning Victoria regia, reveals startling similarities to the Glashaus, which ultimately reveals the Glashaus as directly inspired by Victoria regia.

Environmental Governance for Biodiversity

Effective environmental governance is hampered by the continuing presumption of the state as central actor in the domestic and international political contexts. Over the last 20 years, the traditional 'Westphalian' conception of the sovereign state has come under increasing pressure not only in theory, but also in practice, as evidenced by the increasing importance attributed to the participation of quasi-government and non-government actors in decision-making in domestic and international political issues. This paper is a contribution to the on-going debate about the meaning of effective environmental governance by mapping out a post-Westphalian conception of governance. In particular, it defines governance in relation to the protection of biodiversity; highlights obstacles to effective governance in this area, and discusses forming environmental management plans and environmental governance regimes to implement them. The final section of the paper suggests seven directions for ensuring the realisation of effective environmental governance.

Didiman: Australian agricultural extension officers in the territory of Papua and New Guinea, 1945-1975

Historically, the development philosophy for the two Territories of Papua and New Guinea (known as TPNG, formerly two territories, Papua and New Guinea) was equated with economic development, with a focus on agricultural development. To achieve the modification or complete change in indigenous farming systems the Australian Government’s Department of External Territories adopted and utilised a programme based on agricultural extension. Prior to World War II, under Australian administration, the economic development of these two territories, as in many colonies of the time, was based on the institution of the plantation. Little was initiated in agriculture development for indigenous people. This changed after World War II to a rationale based on the promotion and advancement of primary industry, but also came to include indigenous farmers. To develop agriculture within a colony it was thought that a modification to, or in some cases the complete transformation of, existing farming systems was necessary to improve the material welfare of the population. It was also seen to be a guarantee for the future national interest of the sovereign state after independence was granted. The Didiman and Didimisis became the frontline, field operatives of this theoretical model of development. This thesis examines the Didiman’s field operations, the structural organisation of agricultural administration and the application of policy in the two territories.